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I mean, earlier we had cars based on sedans like the Evolution and the Impreza, but now they are based on hatchbacks like the DS3. Why? Is it because the car becomes lighter and uses less fuel? Or does a small car turn in easily? Or is it just some 'Go Green' BS?

If the current crop of WRC cars had a face off against the 2001 cars (Evo 6, Impreza WRX, Citroen Xsara), which would win?

Universal changes by the FIA moving to the 1.6L displacement engines from the 2 liters. I can't name the other changes off the top of my head. That said, there moving to new regs in 2017 that increase power to about 385, bigger fender flares and allowing for Active Center Differentials again.

One can make an argument that it was part of a push to "Go greener". It's the same with F1. Personally, I haven't followed the WRC consistently since around 2012 as the sport just doesn't grab my attention as much as it did when you had Marcus Gronholm, Loeb, and Solberg still around.

I can assure you that any WRC car from the late 90s/early 2000s would get stomped by the new machines. The technology has advanced so much in AWD, suspension, tires, and engine reliability, it wouldn't be much of a contest. Even a 2005 Xsara WRC would handily beat an WRC-spec Evo VI. That's how quickly the technology changed.

Lighter, smaller, faster, reliable. The smaller cars are a much better platform.

WRC 2 cars would smash any Group B car nowadays.

F1 is a hard comparison because they go from good tires too bad tires. Low down force to high down force. Refueling to no refueling etc...

F1 is fast becoming a joke of a motorsport when it comes down to it. Every year they make racing, ACTUAL driver to driver battling more and more minimal and make it about the cars and the technology, and it is ruining what used to be the pinnacle show of what motorsport could be. I could write paragraphs about it but I'll leave it at that so as not to drag this off-topic.

For WRC, a smaller car will be more competitive. The shorter wheelbases allow for snappier response and rotation into corners, as a primary function. Also, due to the ratio of passenger compartment to overall size, it will allow for the structural rigidity of the roll cage to act upon a higher percentage of total chassis area, increasing the strength, rigidity, and durability of the chassis as a whole. Out of that, you get a car that doesn't flex as much under high stress cornering and is less likely to sustain crippling damage from jumps, off-trail excursions, or other damaging instances that you experience in stage rally.